The chief executive of Royal Bank of Scotland has promised that "wrongdoers" involved in the Libor-rigging scandal would be punished as the bailed-out bank braced for a fine of up to £500m.

In a memo sent to bank staff, Stephen Hester warned that the bank would face "intense" scrutiny once the fine was announced and urged them to overcome "whatever knocks" they faced in the efforts to keep serving the customers.

"What I can promise is that, along with our chairman, [Sir] Philip Hampton, I will not be ducking the difficult questions that come our way.

"Philip and I will explain what went wrong and what we have done to fix it. We will also ensure that wrongdoers have been punished," Hester said.

His remarks come ahead of regulatory action from the UK's Financial Services Authority (FSA) and US authorities. They are expected to level criminal charges against a subsidiary of the Edinburgh-based bank.

The boss of the investment bank, John Hourican, is expected to step aside to be accountable, if not responsible, for the rigging of the benchmark rate. With the fine expected to be announced on Wednesday, the business secretary, Vince Cable, raised the question of the future ownership of RBS.

Cable was an advocate for the full nationalisation of RBS during the 2008 crisis and has also backed plans for a mutualisation.

The Conservative peer and former chancellor Lord Lawson, a member of the banking commission, has recently renewed calls for full state control.

Cable said: "The early hope of reprivatisation now looks a distant dream, unless at an unacceptable loss.

"For the existing semi-state-owned companies, there is a range of options, from reprivatisation at a later stage to continued public ownership or mutualisation through public share distribution, as advocated by the Liberal Democrats. We should keep all of these options in play."

In an interview with the Guardian ahead of two key speeches on banking, Cable called for more individuals to carry the can for the scandals that have gripped the industry, from Libor rigging to mis-selling of payment protection insurance and interest rate swaps.

On Tuesday Barclays set aside a further £1bn to cover the costs of compensation for mis-selling PPI and interest rate swaps – taking total provision for PPI to £2.6bn and for interest rate swaps to £850m.

He would "favour a tougher regime where individuals are [held] responsible". He added: "That's rather important. What's been missing from this endless scandal … is that institutions have been held responsible [but] the idea that individuals should be responsible and penalised in a serious way for real misdemeanours has been completely missing."

He expects the banking standards commission, chaired by Conservative MP Andrew Tyrie, to set out ways to create more criminal offences in its upcoming reports. Tyrie has already won the battle to convince the government to "electrify" the ringfence that banks must erect to separate their high street and investment banking arms to prevent banks gaming the rules.

Cable, who was an advocate of complete separation before the election, said he was pleased with the outcome and agreed that banks needed to be threatened with total breakup. "At the moment the banks are not going to misbehave but we'll get a new generation who haven't got the institutional memory who will be tempted to break the rules. We have to be prepared for that."

Cable questioned whether some of the bank staff who mis-sold interest rate swaps had behaved fraudulently, adding: "I'm not a lawyer, [but] in commonsense terms the question is, isn't this fraud in most people's language?"

His current focus is on growth in small businesses and channelling loans in their direction – after a £7.8bn fall in lending to small and medium-sized enterprises (SMEs) in the past 18 months. The board of his new business bank, chaired by former banker Sir Peter Burt, met on Tuesday.

Conservative business minister Michael Fallon wants banks to publish information about business loans by postcode and by constituency. Discussions are also under way with the Bank of England about how to drive more lending to businesses.